Share of Social Generated E-Commerce Revenue and Sales

Retailers and brands are therefore increasingly focusing their attention on social commerce.

Overall usage on social media platforms is exploding. Millions and millions of consumers are expressing likes on Facebook, tweeting about products on Twitter, and pinning on Pinterest every single day. Many owner/managers look at these numbers differently either clear understanding or lack thereof ‘how to translate online traffic into tangible numbers to their online platforms and then into sales’.

Social Commerce Revenue ImgA

Source : www.addshoppers.com March2013-April2013

What you don’t get are any sales. And sales continue to be the only ROI metic which really matters in business.
Engagement is is banded around online, and working with many craft and food business who actively engage online through many sites with their followers, I have begun to question the logic in investing money in an army of ‘Fans’ who couldn’t give two hoots about the brand and have very little intention to engage with you to purchase your products.

Social Commerce Sales ImgA

Engagement – ‘Likes’, shares, comments.
The problem with engagement? The metric becomes the goal and, quite understandably, stressed-out social media managers focus on new likes, tweets, pins or what ever tickles their fancy (KPI’s) rather than delivering real value. Hence you get pictures and comments of animals, social events. Cute kittens and a disproportionate interest in how audiences are going to spend their weekends.

Social Commerce Sales Revenue Comparison

Audience size doesn’t always translate into more revenue. Smaller brands tend to have bigger audiences and I think this is due to better communication strategies
How is social media ROI measured?
Often times you as the business owner focus on shiny numbers like Likes and Followers. Numbers that are definitely part of social media measurement but does it reflect on the bottom line, money in the till at weeks end?  The fun part is when the accountant asks:
“So now, how can we turn all those likes into tangible sales?”
 
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Financial Innovation

Spending time this week on research into organistion’s. Ensuring our contact details are up to date. One question I pondered over? Why do we only have to publish only our company annual returns, the financial and various liquidity ratio’s and not our strategy and or business model.

Our financial returns are familiar to most of us who run business, from those sole trader one person organisation’s to multi billion business. They are a constant in our business lives.

I understand that your financial data and returns are a snapshot of a particular point in time of an organisation with financial numbers to show current numbers compared to previous years, but no mention of your strategy and business plan, in essence your business model. It is just a looking back exercise and not forward planning for you and your business.

Why do we spend time on past performances, yes they can be a guide to future but thats the magic word ‘a guide’. What I would like and hopefully EU may eventually require organisations to submit your business plan / model with returns. You need to examine your strategy for the years ahead. While details may be confidential but how much more than your financials, it will focus you on growing the business.

Organisations vary in their analysis and updating of business plans. We all strive to get them completed for our startup advisors, to get enterprise up and running, banks on board with and then lapse into reviewing it.

  • A reality check, what is your actual performance?.

  • Is your business plan buried in the back of filing cabinet or worse, like your wedding album?

Your business plan is effective, it highlights areas that you may have examined but not pursued. Your business model, we can analysis your performance. Help you step back and observe your processes and methods.

Note to all: Financial Innovation in the context of this blog does not mean an innovative method of booking or creative financial accounting, i.e. avoiding taxes or dodgy ‘creative’ book keeping.

Business Model

A business model is the story of how an organisation creates, delivers and captures value. Storytelling is how we create emotional connections to any business model idea and a critical capability for all innovators. Stories can change the world.

The essense of any story is the background in the preperation for the story, and the delivery of this.

Each organisation that creates something of value, remembers the story of its success, this is how we remember with passion our team work to solve the issue. The team shares its success, the methods, the reasons, their passion, the beliefs that they had to accomplish the challenge.

  • The story, can help you to understand all aspects of the business model challenges that were addressed.
  • The history allows you to verify that all aspects of the business model are consistent with each other.
  • This creates a sense of bond between all involved, they tacked the challenge and each understand the business model.

We all use stories, from our earliest memories, to ancient fables to convey our journey and bring the listener along with us, they share our footsteps. They no longer are observers, but active participants with us. If we look back and walk through the moments that we remember, we consider that what happened build what we are today. It’s our history and our story.

With the understanding of a business model, we start at looking at the past, and these thoughts dont always ariese in the same way. There are times when we look favourably at events, and other times we have negative thoughts.

Business Models, by their nature, give us a road map for the future based on the events of prior experiences, we cannot avoide them, but use them as a springboard for our story. Good experiences should be encourage, bad ones understood and not repeated.

Tell the story of the future is a matter that should be present in the leaders of the organizations that have the purpose of innovation. But it is not a a discipline held in schools where analysis and synthesis occupy the most of our area of reasoning.

Our business is to help others to understand their business model, help you to adopt best practice from our experiences. You are passionate about your enterprise, we help to put all the elements together. We use the Business Model Canvas to map out your business process, your value chain, revenue and cost stream.